RM 303 EXAM 2 QUESTIONS AND ACCURATE
ANSWERS
Bid rent curve - answer model of how land users bid for location that reveals the
influence on how density of land is used, and competition in the area.
How to calculate bid rent curve - answer 20 mph / wage of $20 per hour = $1.00 per mile.
How to calculate bid rent curve: How much time cost per month is saved by living one
mile closer to central business district? - answer 20 round trips * 2 * $1 = $40
How to calculate bid rent curve: Suppose 106 of the 318 houses have workers who walk
to work
Walking speed: 3 mph - answer $20/3 = 6.67 then 6.67*20*2/= $266.67. All walkers
outbid drivers.
What factor affect a bid-rent curve? - answer number of bidders, wage rate, speed of
travel, frequency of trips
Location Quotient - answer the ratio between the % of employees and the % of
employees in that same type of work nationally. if exceeds 1 then it indicates that its a
base economic activity.
20% education and the national economy is 9% = 20/9 = 2.22 times than normal
education employment (excess).
Economic Base - answer the set of economic activities that a city provides for the world
beyond its boundaries. one job leads to more jobs.
Economic Base: Exports - answer activities or services that bring money into city
(manufacturing, education, health care).
Economic Base: Secondary - answer serves as competition
Clustering and Comparison Activities - answer goods or services whose optimal
location pattern are clustered or close together (malls or dealers). Compare and hop to
one another.
Convenience Activities - answer categorization of some types of urban services and
products that seek to obtain the good or service from the closest available source
(bakeries, fast-food, hair salons, dry cleaners, supermarkets).
Industry Economies of Scale - answer the growth of an industry within a locality that
creates special resources and cost advantages for that industry (automobile, aircraft,
publishing, computer software such as Silicon Valley).
, Agglomeration Economies - answer emergence of specialized resources in a locality in
response to demand from multiple industries. Ex: Fed Reserve in NY helps financial
needs. There can be airport, medical, educational and media needs.
Non-locational factors - answer Floor plan size, Amount of parking, Nature of current
tenant NOT TRANSPORTATION
Market Story Framework - answer story about market segments, initial collection of
data, estimations of market parameters (rental rates, sales projections).
- first analysis and refining research
Market Story Framework: First Analysis - answer what range of parameters are implied
by data, is it useful and necessary? (rental growth rates and sales)
Market Story Framework: Refining Research - answer what factors affect framework,
and information. If story is unconvincing then we need to redefine.
what is the real estate product?
who are the customers?
what do the customers care about?
who are the competitors?
Types of Research - answer exclude the irrelevant data, find proxy variables, use
analogies
Types of Research Examples - answer Elysian Forest, Palm Grove, Plane Vista
Market Segmentation - answer identification and delineation of submarkets. Issues can
be that most data is irrelevant or not readily available.
- core market ex: empty nesters, single parents, other families, unrelated individuals
(categories).
- capture rate
Real Estate Cycles (and when they occur) - answer they are not perfect, longer
construction lead time and poorer market information increases cyclicality.
hotels, offices, retail would have extreme volatile graphs.
GIS (geographic information systems) - answer computerized methods for analyzing
data about communities using maps (plane vista).
Psychographics - answer data intensive, multivariate statistical approach, very
sophisticated (uses attitudes, interests, opinions, demographics).
Survey Research - answer most useful and applied to real estate markets, asking
ANSWERS
Bid rent curve - answer model of how land users bid for location that reveals the
influence on how density of land is used, and competition in the area.
How to calculate bid rent curve - answer 20 mph / wage of $20 per hour = $1.00 per mile.
How to calculate bid rent curve: How much time cost per month is saved by living one
mile closer to central business district? - answer 20 round trips * 2 * $1 = $40
How to calculate bid rent curve: Suppose 106 of the 318 houses have workers who walk
to work
Walking speed: 3 mph - answer $20/3 = 6.67 then 6.67*20*2/= $266.67. All walkers
outbid drivers.
What factor affect a bid-rent curve? - answer number of bidders, wage rate, speed of
travel, frequency of trips
Location Quotient - answer the ratio between the % of employees and the % of
employees in that same type of work nationally. if exceeds 1 then it indicates that its a
base economic activity.
20% education and the national economy is 9% = 20/9 = 2.22 times than normal
education employment (excess).
Economic Base - answer the set of economic activities that a city provides for the world
beyond its boundaries. one job leads to more jobs.
Economic Base: Exports - answer activities or services that bring money into city
(manufacturing, education, health care).
Economic Base: Secondary - answer serves as competition
Clustering and Comparison Activities - answer goods or services whose optimal
location pattern are clustered or close together (malls or dealers). Compare and hop to
one another.
Convenience Activities - answer categorization of some types of urban services and
products that seek to obtain the good or service from the closest available source
(bakeries, fast-food, hair salons, dry cleaners, supermarkets).
Industry Economies of Scale - answer the growth of an industry within a locality that
creates special resources and cost advantages for that industry (automobile, aircraft,
publishing, computer software such as Silicon Valley).
, Agglomeration Economies - answer emergence of specialized resources in a locality in
response to demand from multiple industries. Ex: Fed Reserve in NY helps financial
needs. There can be airport, medical, educational and media needs.
Non-locational factors - answer Floor plan size, Amount of parking, Nature of current
tenant NOT TRANSPORTATION
Market Story Framework - answer story about market segments, initial collection of
data, estimations of market parameters (rental rates, sales projections).
- first analysis and refining research
Market Story Framework: First Analysis - answer what range of parameters are implied
by data, is it useful and necessary? (rental growth rates and sales)
Market Story Framework: Refining Research - answer what factors affect framework,
and information. If story is unconvincing then we need to redefine.
what is the real estate product?
who are the customers?
what do the customers care about?
who are the competitors?
Types of Research - answer exclude the irrelevant data, find proxy variables, use
analogies
Types of Research Examples - answer Elysian Forest, Palm Grove, Plane Vista
Market Segmentation - answer identification and delineation of submarkets. Issues can
be that most data is irrelevant or not readily available.
- core market ex: empty nesters, single parents, other families, unrelated individuals
(categories).
- capture rate
Real Estate Cycles (and when they occur) - answer they are not perfect, longer
construction lead time and poorer market information increases cyclicality.
hotels, offices, retail would have extreme volatile graphs.
GIS (geographic information systems) - answer computerized methods for analyzing
data about communities using maps (plane vista).
Psychographics - answer data intensive, multivariate statistical approach, very
sophisticated (uses attitudes, interests, opinions, demographics).
Survey Research - answer most useful and applied to real estate markets, asking
